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Wednesday, February 21, 2018

US bond yields will continue to rise in 2018. Why?

The USA government has just issued 3 days of bond auctions totalling USD$250b and is expected to raise about USD$1T per annum till 2028.  Furthermore, QE taperings are also being executed simultaneously in Europe & USA.

http://sg-stock.blogspot.sg/2017/10/ecb-will-cut-bond-purchases-to-30b-in.html

http://sg-stock.blogspot.sg/2017/09/us-fed-maintains-interest-rate-and-will.html

The rising bond yields will affect the stock market because fund managers find bonds become more attractive.  Please look at our comment on the connection between bond yield & stock.

http://sg-stock.blogspot.sg/2018/02/stock-markets-are-falling-like-crazy.html

Last but not least, inflation pressure is also rising because of trade wars (anti-dumping measures).

http://sg-stock.blogspot.sg/2018/02/the-usa-is-so-bent-to-have-trade-war.html

http://sg-stock.blogspot.sg/2018/02/china-imposes-anti-dumping-measures-on.html

1 comment:

Eric Ho said...

https://www.marketwatch.com/story/foreign-investors-cut-appetite-for-treasurys-as-us-set-to-flog-record-level-of-debt-2018-02-20?siteid=yhoof2&yptr=yahoo

The lack of foreign investors is definitely a bad news for the USA bond market and it will cause the bond yield to rise more to attract investors.